Why would the lender sell at 75% LTV? Isn’t 95% LTV still a good deal? Are you using today’s appraised value, or the principal amount?
Why did you move from auction to direct deals with investors? I think the auction process is not well received, as investors have lost interest in real estate at current prices, and the people who are still trying to buy don’t have the cash to do so. My realtor friend said she stopped subscribing to foreclosure lists because her clients need loans and they want to be able to inspect the house prior to purchase, both conditions which will not be met for auctions.
You are smart to be early, in the ground floor of this business. Short sales and foreclosures are going to be astronomical, so you are smart to build your name in the early stages of this. You’ve got a 5 – 7 year run for your business. Within 2 years, there will be foreclosure and short sale seminars, and you will have many competitors. But hopefully you will have staked out a position and your market share will keep growing.
